Should foundations established by public universities be allowed to keep donor records secret?

On September 11, the Virginia Supreme Court heard arguments in a case that presents this issue.

The case originated at George Mason University. The public university disclosed some records to a student group, Transparent GMU, last year. Those records confirmed agreements with donors that — by the university's own admission — "fall short of the standards of academic independence," including a $50 million gift from Charles Koch to "promote the conservative principles of governance."

The foundation has resisted efforts to open it records to the public, forcing Transparent GMU to sue.

The University of Louisville and the Courier Journal fought the same legal battle well over a decade ago.

In 2003, the Kentucky Court of Appeals determined that the University of Louisville Foundation — "a nonprofit fiduciary holding funds for the benefit of a state organization" — was a public agency under the open records law and that its records were subject to public inspection.

http://opinions.kycourts.net/COA/2002-CA-001590.pdf

The court concluded that the Foundation was an agency "established, created, and controlled by a public agency," the University of Louisville.

In 2008, the Kentucky Supreme Court declared that the public's right of access to Foundation records extended to records of donations made to the Foundation.

https://caselaw.findlaw.com/ky-supreme-court/1439464.html

The Court focused on the fact that the University and the Foundation "essentially act as one and the same," and that the public has a "legitimate interest" in the operations of both.

The Court expressed concern that "certain donors may not simply wish to conceal their identities, but rather may wish to conceal the true purposes of their donations. Donors, particularly those making substantial gifts, may wish to influence the University's decisions and policies, or to have some type of benefit conferred upon them by the University."

Kentucky's highest court resolved the tension between donors' privacy interests — and the public's interest "in the amounts and sources of monies donated to the Foundation, which ultimately fund the University" — in favor of the public's interest.

The Court noted that the public interest "is particularly piqued by large donations from anonymous donors" which raise "legitimate questions of influence."

The parties presented similar arguments to the Virginia Supreme Court last week in Transparent GMU v George Mason University Foundation.

In addition, Transparent GMU argued that the exclusion of foundations from Virginia's public records law would enable public universities and other public agencies to avoid accountability "merely by outsourcing one of their essential functions to a private corporation."

The Foundation countered that if correction was needed, it should come in the form of a legislative fix.

Virginia awaits judicial resolution of a critical issue that Kentucky's courts decided in favor of public access more than a decade ago.